James Lewis

China's 'New Reality'

Sorry, as long as the trade surplus is growing - China is benefiting.
So if they manage to get a trade surplus increase in 2010, after the obvious boom surplus year they will have in 2009 (when its finished). Then they are doing very well. My bet is its a little stupid to estimate numbers like this, because if Europe and USA slap tariffs on chinese goods. Then there will be a very large deficit recorded. (China's fiscal spending will require a great deal imported commodities in 2010). My bet the reason why they are not discussing 2011 is because they take the stance that the USA/Europe will slap tariffs on China in 2011).

It scares me but I think the Chinese are trying to devalue the appeal of the yuan by printing lots more. So if there was a float, the rmb would decrease because it has been devalued domestically.
If the economic war is really being fought on this front, China needs to watch itself domestically.

After all its has specific policies to limit wage growth under real inflation. If food and property costs go up, the poor will be squeezed even more so than they are now.

There is no way that the Chinese can print money like they have been and real estate/stock market not massively inflate. I am very scared teh Chiense believe that Japan fell into their 20 year slump because of the plaza accord. Not because they tried to inflate to become the largest economy in the world.

interesting..

Global Returns: Stocks Down, Bonds Down

Trading Russia/Brazil is the same as trading commodities.
If commodities carry on their rise or stabilise then Brussia is the way foreward. You start getting a drop in oil etc, then China is the market to be in.

Shortly we will start to see PE ratios in the region of 13-15 in some stocks in China. That suggest that China will improve its dismal performace, we just need the market to capitluate.